PHARMAGENESIS’
GROUP FORMS JOINT VENTURE TO MANUFACTURE AND SELL PG2 IN CHINA

Adjunct
Cancer Therapy Drug Restores Blood Cells During Chemotherapy

BEIJING
-
May 22, 2001 -
Pharmagenesis Inc.’s parent company, the Orchid Group, has entered into a
joint venture agreement with Tianjin Zhong Xin Pharmaceutical Group (TZXP.SG),
one of China's leading pharmaceutical manufacturers, to form a new company for
the production of PG2, a cancer therapy drug.

Tianjin
Zhong Xin Pharmaceutical Group, a leading pharmaceutical company, created
China’s most profitable pharmaceutical joint venture company with
GlaxoSmithKline.Tianjin Zhong Xin
Pharmaceutical Group is also the parent company of two of the top three
traditional Chinese medicine companies and the most profitable exporter of
traditional Chinese medicine in China.The
company was the first Chinese pharmaceutical company to debut on the Singapore
Stock Exchange.

As
a part of the agreement, the joint venture’s new company, to be called Tianjin
Hualong Pharmaceutical Company, will build a new factory for the production of
PG2, a hematopoiesis enhancer that restores blood cells destroyed by
chemotherapy.Pharmagenesis, Inc. developed PG2 from the purified extract of a plant used in traditional Chinese
medicine.

“Our
partnership gives Pharmagenesis the support of one of China’s strongest
pharmaceutical companies to manufacture a drug that will greatly improve quality
of life for those undergoing chemotherapy,” Nicolas Druz, CEO, Pharmagenesis,
said.“PG2 is another step toward
our goal of global acceptance for drugs based on the properties of plants long
used in Chinese medicine.”

Pharmagenesis
hopes to complete trial batches of PG2 by September 2001.Production will be done under the supervision of Chinese State Drug
Administration (SDA).The SDA
employs stringent regulations the same as those used in U.S. FDA drug trials.

Pharmagenesis
will hold a 70 percent share in the new company.A marketing and sales force will be implemented once the SDA grants
further authorizations.

About
Pharmagenesis, Inc.

Pharmagenesis, Inc.
develops anticancer therapies and treatments for cancer therapy-related
bone-marrow suppression and for the management of transplant rejection.The privately held company focuses on developing ethical pharmaceuticals
from purified extracts of plants that have been employed in traditional Chinese
medicine for more than 4,000 years.Efficacy
is validated by clinical trials conforming to standards of appropriate
government regulatory agencies.Pharmaceuticals
developed and/or licensed by the company are being commercialized initially in
the high-growth markets of China and Taiwan.

Pharmagenesis’
corporate headquarters and R & D facility, employing cutting-edge Western
medical research techniques, are located in Palo Alto, Calif.Pharmagenesis also has operations in Beijing and Taipei.